Even as the global financial system becomes ever more fragile and vulnerable
to distruption, feedback loops will maintain the Status Quo for awhile longer.

The best analogy to describe the global financial system may well be "skating on
thin ice." Despite all the "fixes" and "reforms," the ice continues thinning
for a variety of reasons which are not fixable in the current State/Plutocracy-dominated
Status Quo: massive
overindebtedness, both public and private, and a declining ability to service that
ever-rising debt.

Thus it is natural for many observers to see the current crisis-du-jour (Gulf oil
well blowout, China's real estate bubble, sovereign debt/banking insolvency in Europe,
etc.) as the "straw that will break the camel's back," that is, the crisis which will trigger
a phase transition or tipping point to the global collapse which is already
inevitable: demographics, exponential debt and resource depletion
all render the status quo Neoliberal Capitalist Globalized system unsustainable.

The concepts of phase transition and the related "stick-slip hypothesis" play
key parts in the Survival+ critique, as they describe the process of a system
reaching a "critical point": the sand pile suddenly cascades, tectonic plates
shift, causing an earthquake, or the buying of bundled debt (such as mortgage-backed
securities) suddenly drops to near-zero.

But other forces are constantly striving to maintain the Status Quo, and as such
they resist the dynamics pressing the global financial system to the breaking point.
These are negative feedback loops, and the major Central States have deployed
powerful monetary and political tools to stave off collapse.

Here is a diagram of a positive feedback loop in which recession reduces housing
equity which then further reinforces recession, which further depresses housing, and so on:

This chart illustrates how capital declines feed additional declines:

At the critical point, the positive feedback overwhelms the negative feedback
and a death spiral ensues. This diagram charts how raising taxes in a contracting
economy to feed public unions and other tax-dependent fiefdoms creates a "death spiral"
which ends in the bankruptcy of local government.

But the last two years have shown how those with enormous stakes in maintaining
the Status Quo have thrown all their resources into staving off or deflecting the
crises. The Full-Spectrum Defense of the Status Quo is generally
a facsmile of reform, a facade of "change" heralded as the "fix" to all our most
pressing problems, or merely propaganda, i.e. a travesty of a mockery of a sham.

Nonetheless, we would do well not to underestimate the tenaciousness and reserves of those
benefiting from the Status Quo, or the depth of their commitment to doing whatever it
takes to defend their perquisites and power.

But in addition to feedback loops, there are also long-wave cycles which have tended
to play out over history. Nothing is written in stone, of course, except the
endless repetition of human folly, and thus those who dismiss all cycles as mesaningless do
so at their peril.

As a lagniappe, there is fifth cycle possibility conjectured by Elliott Wave
Theory, the Grand Supercycle (not shown), the last of which led to the 1720
South Sea Bubble collapsing and a 50-year long depression,
and a sixth relating to warfare, as wars also tend to cycle, as shown in
The Rhythm of War (recommended).

As an example of how Status Quo resistance/feedback loops can lengthen
the unsustainable longer than seems possible: many of us knew housing was in
massive bubble as early as late 2003, yet the bubble continued expanding for over 3
years, finally popping in early 2007. The insolvent black hole known as Fannie Mae
continued sporting a share of price of $65-$70, even as its obvious value was near-zero.
(I know, because I lost a lot of money betting that the supposedly infallible "market"
would eventually pole-axe the fraudulent Fannie's share price. The
value of Fannie's shares didn't fall until the entire house of cards was in
full-blown collapse.)

Thus I fully expect the U.S. Central State to continue borrowing and squandering
$1.5 trillion a year to maintain the Status Quo and the American Empire, with few if
any visible consequences, as the Chinese Central State and other exporting nations
will desperately continue propping up low interest rates to keep their mercantilist
fantasies (that the U.S. will continue to be the dumping ground for the world's
massive oversupply of exports) alive for another year.

The Fed will persist in its manipulations and machinations to prop up the housing
market and the stock market, as those facades are the critical elements in the
propaganda campaign to convince the fast-crumbling middle-class that all is well and the
Plutocracy is not only firmly in charge, but it's doing a darned fine job of it.

But the heat of insolvency is not dissipating, as much as it is merely being cloaked; the ice is
thinning every day, and the global financial system is becoming more brittle, more
fragile, more vulnerable, more unstable and less resilient. Meanwhile, obfuscation,
misdirection, and outright propaganda have been normalized as "news," the illegitimate
(shadow banking, shadow National Security State, etc.) have been legitimized and
those who challenge the Status Quo or act as whistleblowers are quickly discredited or
marginalized.

My best guess: the wheels won't really fall off the wobbly global cart until
2012-2013, with the possibility that it all hangs together (against ever-longer odds)
until 2014. After a near-collapse experience, things will seem to improve for a few years,
setting up the real collapse in the 2020-2022 time frame. Just a guess...to be revised
as events unfold.

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